Spam I Am
05/03/2004 at 01:00 AM EDT
Scott Richter barely got through high school. Lose the preppy polo shirt and the 6'2" 240-pounder might do nicely at a casting call for bouncers at the club Bada Bing. And at 32, he's worth millions, cited by Details as one of the 10 most influential men under 38. Nothing personal, but he may also be one of the most hated. Why? To quote Monty Python: Spam, spam, spam and spam, that unsolicited commercial e-mail through which Richter peddles credit cards, diet pills and—who can forget—LesbiansSizzle.com?
Experts consider Richter, whose firm, OptInRealBig.com, sends out several hundred million e-mails a day, among the world's top spammers—though he disdains the term. "We're a powerhouse in the e-mail marketing world," is how the spam king puts it. "I stand up for what I do."
He could soon be standing up in court. In December New York State Attorney General Eliot Spitzer and Microsoft Corp. filed separate lawsuits seeking millions in damages from Richter's company and two others, Synergy6 and Delta Seven Communications. The suits claim the firms sent "billions of illegal and deceptive e-mail messages," by offering free items (like Girls Gone Wild DVDs) in exchange for personal information, and that the firms used forged sender names, false subject lines and fake sender addresses—all illegal in both New York State and Washington.
"Last year spam cost U.S. businesses $10 billion," says Paul Judge, chief technology officer for CipherTrust Inc. of Atlanta, an e-mail security company. According to the 2003 CAN-SPAM Act passed by Congress, which imposes limits and penalties on spammers, spam accounts for "over half" of all e-mail traffic "and the volume continues to rise." Aside from overloading systems, says Judge, "you get lost productivity—wasted time of users deleting spam."
Calling the lawsuits a "cheap smear campaign," Richter plans a press conference in coming weeks to announce his legal strategy. "We didn't actually send the mail. I didn't make a penny," he says. Not in that instance, perhaps, but Richter does pull in about $2 million a month. How? By harvesting a vast bank of e-mail addresses, which he obtains mainly through contests and promotions; responders must give out their addresses to sign up. Other companies then pay Richter for the addresses and, often, to send out their promotions. He also markets his own products. He calls his practice not spam, but "opt-in" e-mailing, because consumers sign up voluntarily—as opposed to his definition of spam, "when there is no address to reply to."
Critics say Richter's playing with semantics. "He has gone from spamming for himself to spamming for other people," says John Reid of Spamhaus, an antispam project, who claims not all of the 45 million people on Richter's list willingly subscribed.
Whatever you call him, the Virginia Beach, Va.-born Richter was always an operator. "This kid has been an entrepreneur since his first lemonade stand when he was 4," says his mother, Rosalie. "He was into making money no matter where it was." That would be mainly in the Denver area where Rosalie and her CPA husband, Steve, now divorced, moved when their only child was 5. By the end of high school, Richter had earned at least $500,000 from various enterprises, starting with candy sales. "I hired some kids and we were doing $100 to $200 a day," he says. Then he launched a vending machine empire. "For my 15th birthday I wanted two gumball machines," he says. "I just kept buying more and more." He branched out to video games and, not long after that, some struggling restaurateurs asked if he'd buy them out. Other eateries and bars followed. Then came the Internet, and suddenly, food service seemed so...20th century.
Richter, who now lives in Westminster, Colo., with his girlfriend, Dani, 22, and their twin baby sons Michael and Joseph, started OptlnRealBig in 2001. The first major product he sold online was Inferno, a diet pill. Other hot items: a copy of J.Lo's engagement ring, Iraqi most-wanted playing cards—and an herbal supplement for "penile fitness."
"Business is booming," Richter claims. Perhaps, but for how long? Don't expect a lawsuit to make the world safe for inboxes. "We plan to be around for a long time," he says. "We're not going anywhere."
Richard Jerome. Vickie Bane in Westminster